Council Tax will have risen by 27% under Mayor Jason Perry, as Croydon and six other London boroughs beg Whitehall for multi-million-pound bail-outs
Lost control: Katherine Kerswell and Mayor Jason Perry have awarded themselves pay rises as the council’s overspend for next year is predicted to be close to £100m
Cash-strapped Croydon’s predicted budget overspend for the coming year is now at least £98million.
That’s according to figures released by the council overnight, ahead of next week’s budget-setting Town Hall meeting when, realistically, Mayor Jason Perry will again fail to set a truly balanced budget for 2025-2026.
According to an internal memo circulated to council staff this morning, the £98million is what Katherine Kerswell, the council chief exec, “thinks” the overspend might be. The suggestion is that it could be much worse.
It is becoming ever clearer that Mayor Perry, Kerswell and other council executives have completely lost control of the council’s spending. And that they also have no idea of how to deal with the matter.
The latest doomsday figure from the council comes just a few weeks since they first admitted that the 2025-2026 overspend was looking likely to be £83million. So that means that spending estimates have been increasing at a rate of an extra £2million a week since December.
Out of touch: In a webcast in December, the Mayor referred to the 2024-2025 £20m overspend as ‘slight’
And the 2025-2026 overspend comes on top of the £20million-plus overspend expected in the current, 2024-2025 financial year.
In a webcast in December, Croydon’s Tory Mayor described this as “a slight overspend”. Yet Perry and Kerswell have spent council meetings in the past few weeks waving through generous wage increases for themselves (Kerswell is now on £204,000 per year; part-time Perry has upped his Croydon pay to £84,000).
Croydon’s Council Tax will be increasing by the maximum 4.99% allowed in April (a Council Tax increase of 2.99% and a 2% increase in the adult social care precept levy), which will bring increases in the local rates since 2023 under Mayor Perry to a whopping 27%.
Croydon’s Council Tax is now higher than at any time before, and is the second highest in London (only Kingston charges more). Householders paying Band D Council Tax in Croydon will see their total bills rise to close to £2,500 per year from April.
In her internal memo to staff, Kerswell wrote: “We have already delivered really significant savings, averaging over £41million each year since 2021. That’s more than any other London council. But, demand and costs continue to soar…
“… Right now though, as London’s largest borough, we think that Croydon’s budget gap for next year alone could be £98million.
“When added to the previously agreed amount of annual government support for our debt (£38million), we are asking for £136million of exceptional financial support from the government for 2025-2026.”
Croydon blames increased demand for homelessness help and social care, combined with the rising cost of children’s placements and accommodation, for causing the financial position “to deteriorate significantly”. It claims to have the the third-highest number of people seeking homeless help in the country.
The council’s debt – £1.4billion, which it has accrued over the last 15 years or so – will cost £71million in repayments and interest in the next year.
Six-month wait: Labour government minister Jim McMahon met Perry last week
Mayor Perry finally got to have his meeting with a government minister last week – six months since Labour won the General Election. Perry has said of his meeting with local government minister Jim McMahon, “Like many councils, in the past year spiralling demand for services has put even greater strain on our finances…
“We are taking a raft of action locally here in Croydon, transforming our council to become more cost-effective and efficient, but we cannot solve this alone. We need a solution to Croydon’s debt, and action on the funding and demand issues facing all councils.
“It was good to meet the Minister and I look forward to working with him for Croydon.” Perry had come away from meetings with Tory ministers when the Conservatives were in power with nothing to show for it, and it appears that once again he has been left empty-handed.
What Perry has not yet done is issue a Section 114 notice, effective admission that the council is bankrupt (again). Between November 2020 and November 2022, Croydon issued three S114s, more than any council has ever done, the last one leading to Perry’s 15% Council Tax hike in April 2023.
‘Unsustainable’: Katherine Kerswell, the council CEO, now paid £204,000 pa
But according to Town Hall sources, that’s not on the cards at present. “The new government doesn’t want a dozen or more councils issuing Section 114s all at the same time – and there’s a real risk that might happen.
“Croydon has been operating on S114-style spending controls anyway since last autumn, for all the good it has done. Whitehall has been telling councils it will work with them closely. So far, all that’s amounted to is just more of the same.”
Croydon is among seven London boroughs – with Lambeth, Newham, Havering, Enfield, Barnet and Haringey – who have gone to the Ministry of Housing Communities and Local Government to seek more money to fund services. Newham will be allowed to raise Council Tax by 9% to help it balance its books.
As Kerswell wrote to staff this morning, the council’s soaring overspends “are huge, unsustainable figures and we urgently need a longer-term solution for Croydon”.
Kerswell wrote: “The budget shows the stark scale of Croydon’s financial challenges. It is why we must do things differently and need to act now.” Katherine Kerswell, 63, has been chief executive at Croydon Council since October 2020.
As one Fisher’s Folly insider, who has been constantly worried whether they will lose their job, said this morning after getting the latest morale-booster from his boss, said, “The fact the budget gap just keeps getting bigger shows they haven’t really learnt or done anything differently.
“The phrase ‘we think’, about the amount of the overspend, instils no confidence whatever that the people in charge know what they are doing.”
The predicted overspend is the worst ever seen in Croydon – worse, even, than the budget-busting numbers that led to the council’s financial collapse in 2020.
When he took over in 2022, Perry told a radio interviewer that “things are going to get worse” in Croydon. As we wrote last December: “It’s looking like the only promise the Tory Mayor has managed to keep.”
Read more: Labour accuse Perry of ‘mismanagement’ of Town Hall finances
Read more: ‘Mayor and CEO are respected and provide strong leadership’
Read more: Mayor Perry busts his unbalanced budget with £42m overspend
Read more: Perry pleads poverty when he has more Council Tax than ever
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Yes Perry has delivered on making things worse. Who is he going to blame on making things worse when he starts his campaign to become the DEMOC for the second time? Memories and narratives that had forgotten Perry’s part of the Croydon Debacle in the earlier decades of this century will now be replaced by Perry’s abject performance in failing to solve problems when he has acheived the prominent Local Government role that he no doubt thinks he has always deserved.
So what added value is the Government appointed panel? They cost a lot of money and it’s hard to see where they have made a positive difference.
Most of them are on a day rate of £900.
It seems the only thing they do is to tell the council to sell off all its publicly owned assets leaving us both basically bankrupt and with no assets. Oh that’s just a difference, not a positive difference, my bad.
This part time mayor can’t even run a combustible plastics business he inherited from his family. So how on earth did ppl think he could run an inherited bankrupt council?
Thank fuck for Inside Croydon, otherwise, the people would believe in fake news and Mayor Perry’s lies
Humpty Dumpty sat on a wall
Humpty Dumpty had a great fall
All of our money and all of his men
Couldn’t get budgets to balance again
Perry should be sacked !!!! Why is he still mayor of croydon when he’s done such a bad job?
kick him out of croydon along with the council scum that have bled croydon dry and now the residents are paying for their daylight robbery!!!!!!!
15 years of pay more, get less in return. At least Croydon is reflective of the whole country in that regard.
And they are not the ones who suffer from their incompetence.